Interim Results

ITIS Holdings PLC 15 November 2000 Date: Wednesday 15th November 2000 Contact: Stuart Marks, Chief Executive ITIS Holdings plc Telephone: 0207 282 2945 until 3pm Thereafter: 0161 927 3604 Ginny Pulbrook, Director Citigate Dewe Rogerson Telephone: 0207 282 2945 ITIS Holdings plc 2000 Interim Results Expectations in line; New Strategic Partnerships agreed ITIS Holdings plc ('ITIS') today announces its Interim Results for the six months ended 30th September 2000 ITIS is a location-based content and service provider to the fast growing telematics industry. Highlights * This October the Group successfully listed on the Alternative Investment Market ('AIM') in London raising £27.65m net of expenses; * Maiden results in line with expectations * Turnover up 28.2 % to £311,000 * Operating loss of £3,487,000 reflecting launch of subsidised NavTrak hardware and new driver services; * Launch of NavTrak and development of services well under way; * Continued expansion of franchised dealership groups: Inchcape plc, Sytner Group plc, Snows and Trinity Motors; * First OEM relationship with Massey Ferguson; * Strategic partnerships enabling penetration into new markets; * Increased subscriber numbers, coupled with value-added services. Commenting on the results, Stuart Marks, Chief Executive of ITIS Holdings plc commented: 'In this first set of public results ITIS has achieved good progress. Our focus for the remainder of the year will be to further penetrate the high growth telematics market. The Company has a strong and well-balanced management team and a strong financial position. These features make the outlook for both the existing NavTrak services and for new projects very promising.' Extracts from the Chairman & Chief Executive's Statement: 'We are delighted to report these maiden interim results for the six month period to 30th September. ITIS Holdings plc has established itself as one of the fastest growing telematics service providers in Europe, offering a vehicle tracking and recovery service, roadside assistance, navigation and concierge services through its NavTrak system. We were extremely pleased with the interest shown in our business during the flotation process and by the investment community's recognition of the exciting growth story that the telematics industry offers: industry analysts predict the market for telematics services to grow from US$1billion to US$43bn in 2004. In spite of it being only one month since the listing, we have made excellent progress in pursuing the strategy of growing our relationships with vehicle manufacturers, working with our strategic partners and launching the subsidised NavTrak system as well as developing an innovative range of value-added driver services. The Company operates two subsidiaries: ITIS creates and aggregates content for corporate customers; NavTrak is a provider of location based services to drivers. Minorplanet's in-vehicle technology as used by NavTrak, GE Capital Fleet Services and Minorplanet's own customers, will provide a rich source of Floating Vehicle Data to the Group. Financial Results: The results for the six month period ended 30th September 2000 are very much in line with expectations. Turnover for the period increased by 28.2% to £ 311,000. The loss for the financial period of £3,486,000 fully reflects the Group's gearing up for the launch of the subsidised NavTrak hardware and the new driver services. ITIS's cash balances remain healthy. As at 30th September 2000 they totalled £ 3,987,000 which is stated prior to receiving the net float monies of £ 27,650,000 during October 2000. The cash outflow before financing over the six months was £4,630,000. Review of Business: At the time of our flotation we outlined our strategy for developing the business, namely:- * to stimulate subscriber numbers for the services by the subsidy of the NavTrak hardware: The Group is in the process of converting its dealership customers to a subsidised hardware model. Initial reactions are positive both from dealers and customers, and we believe that this strategy will enable greater penetration of NavTrak units and therefore increase the opportunities to sell additional services. * to recruit new dealer groups, hence encouraging the motor dealers to install NavTrak's services into their fleet vehicles: In addition to our existing good relationships with well known automotive dealers such as HROwen, Lancaster Group and Hartwell, we are pleased to announce the recruitment of a number of new franchised dealership groups including Inchcape plc, Sytner Group plc, Snows and Trinity Motors which gives ITIS a total of 238 dealer outlets in the UK. The Group has an ongoing dealer recruitment programme and is confident that it will result in significant penetration of the new car market. Marketing Agreements NavTrak has been selected by 4car.co.uk as one of their product partners and NavTrak will feature prominently on the site, which is currently the most visited car related web site and is associated with the Channel 4 programme 'Driven'. * to build on existing strong relationships with vehicle manufacturers: The Group is committed to gaining further penetration of the markets within which it operates and is continuing to develop relationships with vehicle manufacturers. We are pleased to announce an agreement with AGCO, the UK distributor of Massey Ferguson. Under this agreement, AGCO will promote NavTrak as its approved security product for Massey Ferguson tractors as well as other vehicles sold, including cars, through its network of 128 dealers. * to develop innovative value-added services: Within the next few weeks, and once all the dealerships are converted to the subsidised model, we will be launching a range of driver services. These include TrafficWatch, a proactive traffic advisory system which tracks the driver's progress along the route stated at the beginning of the journey and JourneyDiary, an electronic log of trips which enables easy calculation of business and personal mileage for the driver. Services will be billed to the customer's credit card in a combination of subscription and pay on use services in accordance with our policy to simplify customer and dealership administration. * to build on opportunities with strategic partners: As stated at the time of our listing we recognise the importance of strategic partnerships and are continuing to support GE Capital Fleet Services with their Fleet Command programme as well as working closely with them to launch the NavTrak services to their customers. Aon Risk Services will be installing NavTrak on all of their company vehicles in the UK as the first stage of a larger roll out to the rest of their customer base. As part of the new agreement signed with Minorplanet earlier this year, both companies have been working closely together to identify new business opportunities. We have identified targets suitable for Floating Vehicle Data and have agreed a pilot scheme in conjunction with Minorplanet's customer base. During the period the Company signed an agreement with Yeoman Group to engage in technical co-operation in a number of areas where the parties share complementary skills. The Yeoman Group owns key technologies for delivering position, direction and navigation services through portable platforms such as mobile phones. Prospects: In-vehicle telematics for drivers using GPS and GSM have traditionally been limited to stolen vehicle recovery, emergency and breakdown services. The Group's strategy is to provide services that can be used on an everyday basis not simply in the event of distress. Our unique approach of subsidising hardware and dealership support will enable the Group to increase subscriber numbers and provide a solid platform from which to develop revenues. Over the past six months the Group has established a platform for growth by investing in its distribution network, its systems and its people. During the next six months further services will come on stream and ITIS will further benefit from its relationships with its strategic partners.' Consolidated profit and loss account Six months to Six months to Year ended 30 September 30 September 31 March 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Turnover 310,656 242,263 429,549 Cost of sales (666,877) (772,497) (1,165,168) __________ __________ __________ Gross loss (356,221) (530,234) (735,619) Other operating costs (3,125,603) (1,502,070) (3,915,975) __________ __________ __________ Operating loss (3,481,824) (2,032,304) (4,651,594) Interest receivable 94,456 1,805 28,675 Interest payable and similar (9,402) (2,931) (21,297) charges __________ __________ __________ Loss on ordinary activities (3,396,770) (2,033,430) (4,644,216) before taxation Tax on loss on ordinary - - - activities __________ __________ __________ Loss on ordinary activities after (3,396,770) (2,033,430) (4,644,216) taxation Dividends on non-equity shares (89,781) - (52,795) __________ __________ __________ Loss for the financial period (3,486,551) (2,033,430) (4,697,011) __________ __________ __________ Loss per ordinary share (p) (6.8) (4.4) (10.1) __________ __________ __________ All activity has arisen from continuing operations. Consolidated statement of total recognised gains and losses Six months to Six months to Year ended 30 September 30 September 31 March 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Loss for the financial period (3,486,551) (2,033,430) (4,697,011) Prior period adjustments - - (818,507) __________ __________ __________ Total gains and losses relating to the (3,486,551) (2,033,430) (5,515,518) period __________ __________ __________ Consolidated balance sheet 30 30 31 March September September 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Fixed assets Intangible assets 523,944 685,758 297,524 Tangible assets 332,243 171,589 215,011 __________ __________ __________ 856,187 857,347 512,535 __________ __________ __________ Current assets Stocks 128,210 28,560 110,985 Debtors 1,153,620 865,784 395,723 Cash at bank and in hand 3,986,606 1,587,624 47,438 __________ __________ __________ 5,268,436 2,481,968 554,146 Creditors: Amounts falling due within one (1,911,096) (1,869,172)(2,059,832) year __________ __________ __________ Net current assets (liabilities) 3,357,340 612,796 (1,505,686) __________ __________ __________ Shareholders' funds (deficit) 4,213,527 1,470,143 (993,151) __________ __________ __________ Shareholders' funds (deficit) may be analysed as: Equity interests 479,700 (641,658)(3,157,747) Non-equity interests 3,733,827 2,111,801 2,164,596 __________ __________ __________ 4,213,527 1,470,143 (993,151) __________ __________ __________ Reconciliation of movements in shareholders' funds 30 30 31 March September September 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Loss for the financial period (3,486,551)(2,033,430)(4,697,011) __________ __________ __________ New equity share capital subscribed 169,741 25,954 38,376 New preference share capital subscribed 1,479,450 2,111,801 2,111,801 Premium on new share capital subscribed net of 6,954,257 1,361,190 1,496,260 expenses Dividends on non-equity shares 89,781 - 52,795 __________ __________ __________ Net addition (reduction) to shareholders' funds 5,206,678 1,465,515 (997,779) Opening shareholders' (deficit) funds (993,151) 4,628 4,628 __________ __________ __________ Closing shareholders' funds (deficit) 4,213,527 1,470,143 (993,151) __________ __________ __________ Consolidated cash flow statement Six months Six months Year to to ended 30 30 31 March September September 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Net cash outflow from operating activities (3,986,649)(1,766,644)(3,177,778) __________ __________ __________ Returns on investments and servicing of finance Interest paid (9,402) (2,931) (21,297) Interest received 94,456 1,805 28,675 __________ __________ __________ Net cash inflow (outflow) 85,054 (1,126) 7,378 __________ __________ __________ Capital expenditure and financial investment Purchase of intangible fixed assets (535,000) (35,000) (285,655) Purchase of tangible fixed assets (193,904) (92,893) (161,067) __________ __________ __________ Net cash outflow from capital expenditure (728,904) (127,893) (446,722) __________ __________ __________ Cash outflow before financing (4,630,499)(1,895,663)(3,617,122) __________ __________ __________ Financing Issue of equity share capital 169,741 25,954 38,376 Issue of preference share capital 1,479,450 2,111,801 2,111,801 Share premium on issue of equity and preference 6,954,257 1,361,190 1,496,260 share capital __________ __________ __________ Net cash inflow 8,603,448 3,498,945 3,646,437 __________ __________ __________ Increase in cash 3,972,949 1,603,282 29,315 __________ __________ __________ Notes (unaudited) 1. Accounting Policies The interim accounts have been prepared using accounting policies stated in the Company's Report and Accounts for the year ended 31 March 2000 and are unaudited. 2. Preparation of the Interim Financial Information The comparative figures for the year ended 31 March 2000 are an abridged version of the Company's full accounts and, together with other financial information contained in these interim results, do not constitute statutory accounts of the ITIS Holdings plc within the meaning of section 240 of the Companies Act 1985. The results for the year ended 31 March 2000 are an extract from the latest published accounts which have been delivered to the Registrar of Companies and upon which the report of the auditors was unqualified. 3. Loss per share Six months Six months Year ended to 30 to 30 31 March September September 2000 2000 1999 Unaudited Unaudited Audited £ £ £ Loss for the financial period (3,486,551) (2,033,430) (4,697,011) __________ __________ __________ Weighted average number of ordinary shares in issue 50,989,762 46,054,825 46,373,352 __________ __________ __________ Loss per ordinary share (p) (6.8) (4.4) (10.1) __________ __________ __________ Due to losses made, there is no difference between loss per ordinary share and diluted loss per ordinary share. On 12 September 2000, each ordinary share of 10p in the capital of the company was sub-divided into 5 ordinary shares of 2p. 4. Dividends on non-equity shares Six months to Six months to Year ended 30 September 30 September 31 March 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Dividend on preference shares (89,781) - (52,795) __________ __________ __________ 5. Net cash outflow from operating activities Six months Six months Year ended to to 30 September 30 September 31 March 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Operating loss (3,481,824) (2,032,304) (4,651,594) Depreciation and amortisation of licenses 385,252 349,325 762,966 Increase in stocks (17,225) (28,560) (110,985) Increase in debtors (757,897) (688,012) (217,951) (Decrease) increase in creditors (114,955) 632,907 1,039,786 __________ __________ __________ Net cash outflow from operating activities (3,986,649) (1,766,644) (3,177,778) __________ __________ __________ 6. Reconciliation of net cash flow to movement in net funds Six months to Six months to Year ended 30 September 30 September 31 March 2000 1999 2000 Unaudited Unaudited Audited £ £ £ Increase in cash in the period 3,972,949 1,603,282 29,315 __________ __________ __________ Change in net debt 3,972,949 1,603,282 29,315 Net funds (debt) brought forward 13,657 (15,658) (15,658) __________ __________ __________ Net funds carried forward 3,986,606 1,587,624 13,657 __________ __________ __________ 7. Post balance sheet event On 16 October 2000, the company placed 16,129,033 new ordinary shares at 186 pence per share on its admission to the Alternative Investment Market. 8. Interim Statement A copy of this announcement will be circulated to all registered shareholders of the Company and copies will be available for members of the public upon application to the Registered Office at The Warrant House, 1High Street, Altrincham, Cheshire, WA14 1PZ.

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